KUALA LUMPUR – The ringgit is expected to trade at current levels next week and is poised to reach 4.30 against the United States dollar should risk-on sentiment hold and oil prices continue to decline, said a trader.
The lack of local positive catalysts coupled with the high number of Covid-19 cases will dampen investor confidence, and they may adopt a wait-and-see approach.
Yesterday, the Health Ministry reported a decline in coronavirus cases to 12,541 from the record-high 13,215 on Thursday, bringing the cumulative total to 893,323.
Malaysian Industrial Development Finance Bhd research economist Abdul Mui’zz Norhalim told Bernama that the ringgit is expected to be influenced by growth concerns as the market is forecast to continue focusing on the virus situation in Malaysia.
“Furthermore, we expect that the ongoing talks on quantitative easing tapering by the US Federal Reserve could affect the performance of emerging market currencies, including the ringgit.
“For now, we believe the impact of the oil price movement on the ringgit will be rather limited because the market is focusing on near-term growth outlook and changes in the global financial market.”
However, he said, any further movement in oil prices beyond the current level may provide some positive support to the local note, at least from weakening further against the greenback.
On a weekly basis, the ringgit weakened versus the dollar to 4.2040/2070 from 4.1895/1940.
It was lower against other major currencies, too.
Against the Singapore dollar, the ringgit depreciated to 3.1053/1078 from 3.0953/0991 a week ago, and fell against the British pound to 5.8129/8170 from 5.7798/7860.
It declined against the euro to 4.9687/9723 from 4.9667/9720 and slipped vis-a-vis the Japanese yen to 3.8180/8207 from 3.8076/8120. – Bernama, July 17, 2021
